[Reporter’s View] Potential drawbacks of expanding RSAs

to cover more drugs

It has been announced that more drugs will be added to the Risk Sharing Agreements (RSAs) track, which will help to improve patient access and reduce uncertainties.

 

In December, the ‘Improvement of the Drug Pricing System to Ensure Fair-value Compensation for Innovative New Drugs and Healthcare Security’ was announced.

 

Under this system, drugs to treat ‘Irreversible Chronic and Severe Diseases’ will be eligible for the RSAs track.

 

The current RSAs only applies to anticancer and orphan drugs, which treat life-threatening and severe diseases that cannot be treated with substitute drugs.

 

In the future, the RSAs will cover drugs that are used to treat chronic and severe diseases that cannot be treated with substitute drugs and result in irreversible deterioration in the quality of life.

 

For example, RSAs will provide coverage for treatments for generalized pustular psoriasis, interstitial lung disease, hereditary angioedema, and severe asthma.

 

The improvement in the drug pricing system will also likely include implementing a dual price system through RSAS to support the export of domestically developed new drugs.

 

The plan is for new drugs granted preferential pricing due to domestic clinical trial status to be listed for the RSAs with essential reimbursement pricing if confirmed to be intended for foreign market distribution and technology export.

 

The RSAs were introduced to South Korea ten years ago.

 

Starting in December 2013, RSAs became available for orphan drugs or anti-cancer drugs without substitutes.

 

Since then, the scope of RSAs has continued to expand through revisions and amendments.

 

In 2020, the coverage was extended to include tuberculosis treatments, antibiotics, and emergency antidotes.

 

Additionally, RSAs were made applicable to subsequent therapeutically equivalent and cost-effective drugs.

 

The advantages of the RSAs are evident.

 

Pharmaceutical companies and insurance authorities can expedite reimbursement inclusion by sharing the uncertainty of drug efficacy and the financial risk burden on health insurance.

 

Expedited listing enables patients to access new treatments.

 

Pharmaceutical companies can overcome the disadvantage of information disclosure in international drug price negotiations by differentiating between the list price and the actual price.

 

However, implementing a dual price system may negatively affect price transparency, potentially disadvantaging patients.

 

For example, patients who paid the total cost of drugs under the RSAs or those who receive selective reimbursement may be eligible for a refund of a portion of the drug cost from pharmaceutical companies, but only if they apply.

 

Patients who are not properly informed may miss out on reimbursement.

 

If the contract renegotiations fail, the drug may be transitioned to non-reimbursable status, potentially increasing the financial burden on patients who were previously covered.

 

The issue of price transparency is being raised internationally.

 

Recently, in Spain, a citizens' group filed a lawsuit demanding the disclosure of actual drug prices under a risk-sharing scheme, and the court accepted the case.

 

Administrative burden is also a concern.

 

Regarding patient refunds, the National Health Insurance Service (NHIS) directly handles the process.

 

For example, a patient was charged KRW 1 million for a cancer drug, and they paid a 5% co-payment rate, which was KRW 50,000.

 

In this case, if a refund rate of 30% is applied according to the contract, and the NHIS receives KRW 300,000 from the pharmaceutical company, the final burden on the patient is not just KRW 50,000, but 5% of KRW 700,000, which is KRW 35,000.

 

Therefore, the NHIS should refund the difference of KRW 15,000.

 

The issue is that the government bears the total burden of this administrative process.

 

With increasing medications subject to RSAs, the workload is only getting heavier.

 

The situation is worsened by the shortage of officials with pharmaceutical expertise due to the drug department's relocation to local areas.

 

It is reported that in advanced countries such as France, medications subject to RSAs are not refunded at all.

 

Because Korea’s initial system included patient refunds, administrative burdens have yet to be relieved in South Korea.

 

While hiring dedicated personnel could help minimize administrative burdens, it would result in additional costs.

 

Experts say expanding RSAs should be handled delicately due to administrative costs and price transparency issues.

 

However, recent government policies appear to be focusing on improving patients' access to new drugs without considering the administrative burden, leading to an increase in drugs subject to RSAs.

 

The government should strengthen the review process to ensure RSAs are applied only to essential drugs.

 

It is important to establish measures to minimize administrative burden to create sustainable policies.